8-K
SOUNDHOUND AI, INC. (SOUN)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________________________
FORM 8-K
_________________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 27, 2025
_________________________________________
SOUNDHOUND AI, INC.
(Exact name of registrant as specified in its charter)
_________________________________________
| Delaware | 001-40193 | 85-1286799 | |||
|---|---|---|---|---|---|
| (State or other jurisdiction<br><br>of incorporation) | (Commission File<br><br>Number) | (I.R.S. Employer<br><br>Identification No.) | 5400 Betsy Ross Drive<br><br>Santa Clara, CA | 95054 | |
| --- | --- | ||||
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (408) 441-3200
(Former name or former address, if changed since last report)
_________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||||
|---|---|---|---|---|---|
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||||
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||||
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | Title of each class | Trading Symbol | Name of each exchange on which registered | |
| --- | --- | --- | |||
| Class A Common Stock, $0.0001 par value per share | SOUN | The Nasdaq Stock Market LLC | |||
| Warrants, each exercisable for one share of Class A Common Stock at an exercise price of $11.50 per share, subject to adjustment | SOUNW | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 2.02 Results of Operations and Financial Condition.
On February 27, 2025, SoundHound AI, Inc. (the “Company”) issued a press release announcing financial results and operational highlights for the fourth quarter and year ended December 31, 2024. A copy of the press release is furnished as Exhibit 99.1 to this current report on Form 8-K. The Company is also furnishing as Exhibit 99.2 to this current report on Form 8-K the consolidated balance sheets of the Company as of December 31, 2024, and the related consolidated statements of operations and comprehensive loss and consolidated statements of cash flows for the period ended December 31, 2024.
Item 9.01. Financial Statement and Exhibits.
| Exhibit Number | Description |
|---|---|
| 99.1 | Press Release, dated February 27, 2025 |
| 99.2 | Financial statements for the period ended December 31, 2024 |
| 104 | Cover Page Interactive Data File (formatted as inline XBRL) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.
| February 27, 2025 | SoundHound AI, Inc. | ||
|---|---|---|---|
| By: | /s/ Keyvan Mohajer | ||
| Name: | Keyvan Mohajer | ||
| Title: | Chief Executive Officer |
3
Document
SoundHound AI Reports Record Fourth Quarter Revenue, Up 101%, Exceeding $34.5 Million; Raises Full Year Outlook
•Strong year-end performance propels the company to the top end of revenue guidance range with strong momentum in voice-enabled Agentic AI
•Company closes the year with nearly $200 million in cash and no debt
SANTA CLARA, Calif.--(BUSINESS WIRE)--SoundHound AI, Inc. (Nasdaq: SOUN), a global leader in voice artificial intelligence, today reported its financial results for the fourth quarter and full year 2024.
“We had a breakthrough year, expanding our leadership position in voice and conversational AI through major customer wins, expanded partnerships, groundbreaking generative AI innovation, and strategic acquisitions,” said Keyvan Mohajer, CEO and Co-Founder of SoundHound AI. “As we move into the era of Agentic AI, we are uniquely positioned to capitalize on this evolving category. Together with our existing broad portfolio of voice-enabled AI solutions we can deliver even greater commercial impact.”
Fourth Quarter and Full Year Financial Highlights
•Fourth quarter revenue was $34.5 million, an increase of 101% year-over-year
•Fourth quarter GAAP gross margin was 39.9%; non-GAAP gross margin was 52.1%
•Fourth quarter adjusted EBITDA was $(16.8) million
•Full year revenue was $84.7 million, an increase of 85% year-over-year
•Full year GAAP gross margin was 48.9%; non-GAAP gross margin was 58.5%
•Full year adjusted EBITDA was $(61.9) million
•SoundHound’s year-end stock price increase resulted in an increase in its fair value of contingent liabilities, significantly impacting both fourth quarter and full year GAAP net loss and EPS. The fluctuation is non-operating and non-cash in nature and is calculated based on mark to market fair value accounting standards. The corresponding non-GAAP values are not impacted. Accordingly, fourth quarter GAAP EPS was $(0.69) and fourth quarter non-GAAP EPS was $(0.05).
“We exited 2024 in a position of strength, and with accelerating momentum," said Nitesh Sharan, CFO of SoundHound AI. "Our foundation runs deep, with a rapidly growing and diversified customer base and a highly capable team executing with tenacity to capture the tremendous opportunities in front of us.”
Business Highlights
Customer Momentum
•In Restaurants: Working with over 30% of the top 20 quick-service restaurant (QSR) brands, and continuing to expand across renowned restaurant brands including Burger King UK, Church’s Texas Chicken, Peet’s Coffee, Torchy’s Tacos, and Whataburger, among others.
•In Healthcare: New partners including Duke Health, Wellstar Health System, and Englewood Health. Customers include Allina Health, Aveanna Healthcare, and MUSC Health, among others.
•In Automotive: Expanding adoption across leading EV manufacturers, with customers including Lucid Motors, and Togg; launched in Lancia vehicles in Europe, adding to six other live Stellantis brands with SoundHound Chat AI Automotive.
•In Retail: Expanding AI solutions for multi-location retail brands in clothing, fitness, vehicle maintenance, home services, waste management, and more. Customers include Torrid, multiple Planet Fitness franchise groups, and My Gym, among others.
•In Energy: SoundHound continues to expand into new industries, adding one of the largest electric utilities in the United States to our wide-ranging portfolio of customers.
•In Government: SoundHound signed a contract with the City of Coral Springs and continues to roll out our conversational AI capabilities with federal government agencies such as a branch of the United States military together with General Dynamics Information Technology.
•In Telecom: Expanding in South America with Telefónica following recent multi-year renewal, and scaling with a major European broadcaster and telecommunications provider in five countries.
•In Financial Services: Customers including BNP Paribas as well regional banks and credit unions such as American Heritage Credit Union, Nordic Bank, Sterling Bank, Truly Credit Union. SoundHound also works with 70% of the top 10 global financial institutions.
•In Insurance: In partnership with EXL expanding our industry presence with customers such as Transamerica, and scaling with companies like Apivia Courtage – surpassing 100 thousand calls automated in 2024.
•In Travel and Hospitality: Enhancing customer experiences for companies like AeroMexico and Resorts World Las Vegas, which recently highlighted our presence at CES 2025 on their digital display on The Strip.
Other Notable Highlights
•SoundHound is at the forefront of the Agentic AI revolution, leveraging its proven platform and strong market position to deliver next-generation agentic capabilities – an inevitable evolution in AI functionality for its customers.
•Unveiled the first ever in-vehicle voice commerce platform that enables seamless voice-controlled food ordering on the go at CES 2025.
•Partnered with Rekor to develop first-of-its-kind audio-visual AI, bringing hands-free voice control to emergency vehicle technology.
•Leading phone ordering technology surpassed 100 million customer interactions and processed hundreds of millions of dollars in restaurant orders.
•Conducted a research study about voice generative AI in vehicles, which found that 77% of regular drivers are likely to use voice generative AI capabilities in their vehicle if available.
Events and Awards
•Successful showcase at CES 2025, featuring collaborations with NVIDIA, Perplexity, Lucid Motors, LG and a broad range of the company's restaurant partners.
•SoundHound’s best-in-class technology earned multiple awards:
◦Frost Radar™ Leader in Enterprise Conversational AI in Healthcare 2024, XCelent Advanced Technology 2024 Award,
◦Best Use of AI in the Automation & Self-Service Awards 2024,
◦“Overall Connected Solution of the Year” at the AutoTech Breakthrough Awards
◦Shortlisted for Reuters 2024 Automotive D.R.I.V.E Honours for Innovation,
◦Finalist for the 2025 Automotive News PACE Awards.
•The company will be participating in NVIDIA GTC 2025, featuring demos of its voice assistant leveraging generative AI on the edge with NVIDIA Drive AGX™, and its recently introduced voice commerce ecosystem.
Fourth Quarter 2024 Financial Measures1
| Three Months Ended<br><br>(thousands, unless otherwise noted) | December 31, 2024 | December 31, 2023 | Change | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Revenues | $ | 34,543 | $ | 17,147 | 101 | % | ||||
| GAAP gross profit | $ | 13,784 | $ | 13,236 | 4 | % | ||||
| GAAP gross margin | 39.9% | 77.2% | (37.3) | pp | ||||||
| Non-GAAP gross profit | $ | 18,007 | $ | 13,354 | 35 | % | ||||
| Non-GAAP gross margin | 52.1% | 77.9% | (25.8) | pp | ||||||
| GAAP operating loss2 | $ | (257,072) | $ | (12,393) | 1,974 | % | ||||
| Non-GAAP adjusted EBITDA | $ | (16,793) | $ | (3,593) | 367 | % | ||||
| GAAP net loss2 | $ | (258,599) | $ | (18,003) | 1,336 | % | ||||
| Non-GAAP net loss | $ | (18,993) | $ | (9,771) | 94 | % | ||||
| GAAP net loss per share2 | $ | (0.69) | $ | (0.07) | $ | (0.62) | ||||
| Non-GAAP net loss per share | $ | (0.05) | $ | (0.04) | $ | (0.01) |
Full Year 2024 Financial Measures1
| Twelve Months Ended<br><br>(thousands, unless otherwise noted) | December 31, 2024 | December 31, 2023 | Change | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Revenues | $ | 84,693 | $ | 45,873 | 85 | % | ||||
| GAAP gross profit | $ | 41,384 | $ | 34,566 | 20 | % | ||||
| GAAP gross margin | 48.9% | 75.4% | (26.5) | pp | ||||||
| Non-GAAP gross profit | $ | 49,538 | $ | 34,978 | 42 | % | ||||
| Non-GAAP gross margin | 58.5% | 76.2% | (17.8) | pp | ||||||
| GAAP operating loss2 | $ | (341,353) | $ | (68,608) | 398 | % | ||||
| Non-GAAP adjusted EBITDA | $ | (61,915) | $ | (35,896) | 72 | % | ||||
| GAAP net loss2 | $ | (350,681) | $ | (88,937) | 294 | % | ||||
| Non-GAAP net loss | $ | (69,073) | $ | (58,162) | 19 | % | ||||
| GAAP net loss per share2 | $ | (1.04) | $ | (0.40) | $ | (0.64) | ||||
| Non-GAAP net loss per share | $ | (0.20) | $ | (0.25) | $ | 0.05 |
1)Please see tables below for a reconciliation from GAAP to non-GAAP.
2)GAAP-only operating loss includes a significant impact from the calculated fair value of contingent acquisition liabilities where future earn-out shares are marked-to-market on a quarterly basis, and with the increase in stock price at year-end the loss associated with this item was $221 million in the fourth quarter 2024 and $223 million in full year 2024, respectively. Non-GAAP measures exclude this non-cash impact.
Liquidity and Cash Flows
The company’s total cash and cash equivalents was $198 million at December 31, 2024. The company had no outstanding debt at December 31, 2024.
Condensed Cash Flow Statement
| Year Ended<br><br>(thousands) | December 31, 2024 | December 31, 2023 | ||||
|---|---|---|---|---|---|---|
| Cash flows: | ||||||
| Net cash used in operating activities | $ | (108,878) | $ | (68,265) | ||
| Net cash used in investing activities | (12,372) | (392) | ||||
| Net cash provided by financing activities | 210,906 | 168,237 | ||||
| Effects of exchange rate changes on cash | 225 | (20) | ||||
| Net change in cash and cash equivalents | $ | 89,881 | $ | 99,560 |
Business Outlook
SoundHound raises its full year 2025 revenue outlook to be in a range of $157 to $177 million.
Additional Information
For more information please see the company’s SEC filings which can be obtained on the company’s website at investors.soundhound.com. The financial statements for the company’s fiscal year ended December 31, 2024 will be posted on the website, and will be included as an attachment to the company’s current report on Form 8-K filed concurrently with the dissemination of this press release. The financial data presented in this press release should be considered preliminary and unaudited until the company files its Annual Report on Form 10-K.
Conference Call and Webcast
Keyvan Mohajer, Co-Founder and CEO, and Nitesh Sharan, CFO will host a live audio conference call and webcast today at 2:00 p.m. Pacific Time/5:00 p.m. Eastern Time. A live webcast and replay will be accessible at investors.soundhound.com.
About SoundHound AI
SoundHound (Nasdaq: SOUN), a global leader in conversational intelligence, offers voice and conversational AI solutions that let businesses offer incredible experiences to their customers. Built on proprietary technology, SoundHound’s voice AI delivers best-in-class speed and accuracy in numerous languages to product creators and service providers across retail, financial services, healthcare, automotive, smart devices, and restaurants via groundbreaking AI-driven products like Smart Answering, Smart Ordering, Dynamic Drive Thru, and Amelia AI Agents. Along with SoundHound Chat AI, a powerful voice assistant with integrated Generative AI, SoundHound powers millions of products and services, and processes billions of interactions each year for world class businesses. www.soundhound.com
Forward Looking Statements
This press release contains forward-looking statements, which are not historical facts, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In some cases, you can identify forward-looking statements by the use of words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” “likely,” “will,” “would” and variations of these terms and similar expressions, or the negative of these terms or similar expressions. These forward-looking statements include, but are not limited to, statements concerning our expected financial performance, our ability to implement our business strategy and anticipated business and operations, and guidance for financial results for 2025. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by us and our management, are inherently uncertain. As a result, readers are cautioned not to place undue reliance on these forward-looking statements. Our actual results may differ materially from those expressed or implied by these forward-looking statements as a result of risks and uncertainties impacting SoundHound’s business including, our ability to successfully launch and commercialize new products and services and derive significant revenue, our market opportunity and our ability to acquire new customers and retain existing customers, unexpected costs, charges or expenses resulting from our 2024 acquisitions, the ability of our 2024 acquisitions to be accretive on the company's financial results, and those other factors described in our risk factors set forth in our filings with the Securities and Exchange Commission from time to time, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. We do not intend to update or alter our forward-looking
statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
Non-GAAP Measures of Financial Performance
To supplement the company’s financial statements, which are presented on the basis of U.S. generally accepted accounting principles (GAAP), the following non-GAAP measures of financial performance are included in this release: non-GAAP gross profit, non-GAAP gross margin, adjusted EBITDA, non-GAAP net loss and non-GAAP earnings per share.
The company believes that providing this non-GAAP information in addition to the GAAP financial information allows investors to view the financial results in the way the company views its operating results. The company also believes that providing this information allows investors to not only better understand the company's financial performance, but also, better evaluate the information used by management to evaluate and measure such performance.
As such, the company believes that disclosing non-GAAP financial measures to the readers of its financial statements provides the reader with useful supplemental information that allows for greater transparency in the review of the company’s financial and operational performance.
The company defines its non-GAAP measures by excluding certain items:
The company arrives at non-GAAP gross profit and non-GAAP gross margin by excluding (i) amortization of intangibles (including acquired intangible assets) and (ii) stock-based compensation.
The company arrives at adjusted EBITDA by excluding (i) total other interest, net (included other interest and expense), (ii) loss on early extinguishment of debt, (iii) income taxes/(benefits), (iv) depreciation and amortization expense (including acquired intangible assets), (v) stock-based compensation, (vi) restructuring expense, (vii) change in fair value of contingent acquisition liabilities, and (viii) acquisition-related expenses.
The company arrives at non-GAAP net loss and non-GAAP net loss per share by excluding (i) depreciation and amortization expense (including acquired intangible assets), (ii) stock-based compensation, (iii) restructuring expense, (iv) loss on early extinguishment of debt, (v) change in fair value of contingent acquisition liabilities, (vi) gain on bargain purchase, (vii) acquisition-related expenses, and (viii) income tax effects related to acquisitions.
Reconciliations of GAAP to these adjusted non-GAAP financial measures are included in the tables below. When analyzing the company's operating results, investors should not consider non-GAAP measures as substitutes for the comparable financial measures prepared in accordance with GAAP.
To the extent that the company presents any forward-looking non-GAAP financial measures, the company does not present a quantitative reconciliation of such measures to the most directly comparable GAAP financial measure (or otherwise present such forward-looking GAAP measures) because it is impractical to do so.
Fourth Quarter Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit and GAAP Gross Margin to Non-GAAP Gross Margin
| Three Months Ended<br><br>(thousands, unless otherwise noted) | December 31, 2024 | December 31, 2023 | ||||
|---|---|---|---|---|---|---|
| GAAP gross profit1 | $ | 13,784 | $ | 13,236 | ||
| Adjustments: | ||||||
| Amortization of Intangibles | 4,123 | — | ||||
| Stock-based compensation | 100 | 118 | ||||
| Non-GAAP gross profit | $ | 18,007 | $ | 13,354 | ||
| GAAP gross margin | 39.9% | 77.2% | ||||
| Non-GAAP gross margin | 52.1% | 77.9% |
1)GAAP gross profit is calculated by subtracting the cost of revenues from revenues.
Fourth Quarter Reconciliation of GAAP Net Loss to Non-GAAP Adjusted EBITDA
| Three Months Ended<br><br>(thousands) | December 31, 2024 | December 31, 2023 | ||||
|---|---|---|---|---|---|---|
| GAAP net loss | $ | (258,599) | $ | (18,003) | ||
| Adjustments: | ||||||
| Total other expense, net1 | 1,174 | 4,003 | ||||
| Loss on early extinguishment of debt | 42 | — | ||||
| Income taxes/(benefits) | 311 | 1,607 | ||||
| Depreciation and amortization | 7,939 | 372 | ||||
| Stock-based compensation | 9,853 | 6,569 | ||||
| Restructuring | — | 806 | ||||
| Change in fair value of contingent acquisition liabilities | 220,946 | — | ||||
| Acquisition-related expenses | 1,541 | 1,053 | ||||
| Non-GAAP adjusted EBITDA | $ | (16,793) | $ | (3,593) |
1)Includes other income (expense), net of $0.1 and $1.5 million for the three months ended December 31, 2024 and 2023, respectively.
Fourth Quarter Reconciliation of GAAP Net Loss to Non-GAAP Net Loss and Non-GAAP Net Loss Per Share
| Three Months Ended<br><br>(thousands, unless otherwise noted) | December 31, 2024 | December 31, 2023 | ||
|---|---|---|---|---|
| GAAP net loss attributable to SoundHound common shareholders | ||||
| Adjustments: | ||||
| Depreciation and amortization | 7,939 | 372 | ||
| Stock-based compensation | 9,853 | 6,569 | ||
| Restructuring | — | 806 | ||
| Loss on early extinguishment of debt | 42 | — | ||
| Change in fair value of contingent acquisition liabilities | 220,946 | — | ||
| Acquisition-related expenses | 1,541 | 1,053 | ||
| Income tax effects related to acquisitions | (715) | — | ||
| Non-GAAP net loss | ||||
| GAAP net loss per share1 | (0.69) | (0.07) | ||
| Adjustments | 0.64 | 0.03 | ||
| Non-GAAP net loss per share1 | (0.05) | (0.04) |
All values are in US Dollars.
1)Weighted average common shares outstanding (basic and diluted) for the three months ended December 31, 2024 and 2023 were 375,102,329 and 248,250,552, respectively.
Full Year Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit and GAAP Gross Margin to Non-GAAP Gross Margin
| Year Ended<br><br>(thousands, unless otherwise noted) | December 31, 2024 | December 31, 2023 | ||||
|---|---|---|---|---|---|---|
| GAAP gross profit1 | $ | 41,384 | $ | 34,566 | ||
| Adjustments: | ||||||
| Amortization of Intangibles | 7,696 | — | ||||
| Stock-based compensation | 458 | 412 | ||||
| Non-GAAP gross profit | $ | 49,538 | $ | 34,978 | ||
| GAAP gross margin | 48.9% | 75.4% | ||||
| Non-GAAP gross margin | 58.5% | 76.2% |
1)GAAP gross profit is calculated by subtracting the cost of revenues from revenues.
Full Year Reconciliation of GAAP Net Loss to Non-GAAP Adjusted EBITDA
| Year Ended<br><br>(thousands) | December 31, 2024 | December 31, 2023 | ||||
|---|---|---|---|---|---|---|
| GAAP net loss | $ | (350,681) | $ | (88,937) | ||
| Adjustments: | ||||||
| Total other expense, net1 | 2,946 | 15,578 | ||||
| Loss on early extinguishment of debt | 15,629 | 837 | ||||
| Income taxes/(benefits) | (9,247) | 3,914 | ||||
| Depreciation and amortization | 16,054 | 2,313 | ||||
| Stock-based compensation | 33,145 | 24,789 | ||||
| Restructuring | — | 4,557 | ||||
| Change in fair value of contingent acquisition liabilities | 222,670 | — | ||||
| Acquisition-related expenses | 7,569 | 1,053 | ||||
| Non-GAAP adjusted EBITDA | $ | (61,915) | $ | (35,896) |
1)Includes other income (expense), net of $9.2 and $1.2 million for the years ended December 31, 2024 and 2023, respectively.
Full Year Reconciliation of GAAP Net Loss to Non-GAAP Net Loss and Non-GAAP Net Loss Per Share
| Year Ended<br><br>(thousands, unless otherwise noted) | December 31, 2024 | December 31, 2023 | ||
|---|---|---|---|---|
| GAAP net loss attributable to SoundHound common shareholders | ||||
| Adjustments: | ||||
| Depreciation and amortization | 16,054 | 2,313 | ||
| Stock-based compensation | 33,145 | 24,789 | ||
| Restructuring | — | 4,557 | ||
| Loss on early extinguishment of debt | 15,629 | 837 | ||
| Change in fair value of contingent acquisition liabilities | 222,670 | — | ||
| Gain on bargain purchase | (1,223) | — | ||
| Acquisition-related expenses | 7,569 | 1,053 | ||
| Income tax effects related to acquisitions | (11,820) | — | ||
| Non-GAAP net loss | ||||
| GAAP net loss per share1 | (1.04) | (0.40) | ||
| Adjustments | 0.84 | 0.15 | ||
| Non-GAAP net loss per share1 | (0.20) | (0.25) |
All values are in US Dollars.
1)Weighted average common shares outstanding (basic and diluted) for the years ended December 31, 2024 and 2023 were 338,462,574 and 229,264,904, respectively.
Investors:
Scott Smith
408-724-1498
IR@SoundHound.com
Media:
Gianna Arantes
201-815-9852
PR@SoundHound.com
Document
SOUNDHOUND AI, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
| December 31,<br>2024 | December 31,<br>2023 | |||
|---|---|---|---|---|
| (Unaudited) | ||||
| ASSETS | ||||
| Current assets: | ||||
| Cash and cash equivalents | $ | 198,240 | $ | 95,260 |
| Accounts receivable, net of allowances of $726 and $203 as of December 31, 2024 and 2023, respectively | 23,159 | 4,050 | ||
| Contract assets and unbilled revenue, net | 26,645 | 11,780 | ||
| Other current assets | 7,476 | 2,452 | ||
| Total current assets | 255,520 | 113,542 | ||
| Restricted cash equivalents, non-current | 676 | 13,775 | ||
| Right-of-use assets | 4,692 | 5,210 | ||
| Property and equipment, net | 1,239 | 1,515 | ||
| Goodwill | 101,704 | — | ||
| Intangible assets, net | 174,943 | — | ||
| Deferred tax asset | 4 | 11 | ||
| Contract assets and unbilled revenue, non-current, net | 12,879 | 16,492 | ||
| Other non-current assets | 2,296 | 577 | ||
| Total assets | $ | 553,953 | $ | 151,122 |
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||
| Current liabilities: | ||||
| Accounts payable | $ | 5,559 | $ | 1,653 |
| Accrued liabilities | 26,291 | 13,884 | ||
| Operating lease liabilities | 1,898 | 2,637 | ||
| Finance lease liabilities | 49 | 121 | ||
| Income tax liability | 2,750 | 1,618 | ||
| Deferred revenue | 23,876 | 4,310 | ||
| Other current liabilities | 7,319 | — | ||
| Total current liabilities | 67,742 | 24,223 | ||
| Operating lease liabilities, net of current portion | 2,403 | 3,089 | ||
| Deferred revenue, net of current portion | 6,862 | 4,910 | ||
| Long-term debt | — | 84,312 | ||
| Contingent acquisition liabilities | 286,898 | — | ||
| Income tax liability, net of current portion | 3,075 | 2,453 | ||
| Other non-current liabilities | 4,320 | 3,967 | ||
| Total liabilities | 371,300 | 122,954 | ||
| Commitments and contingencies | ||||
| Stockholders’ equity (deficit): | ||||
| Series A Preferred Stock, $0.0001 par value; 1,000,000 shares authorized; 0 and 475,005 shares issued and outstanding, aggregate liquidation preference of $— and $16,227 as of December 31, 2024 and December 31, 2023, respectively | — | 14,187 | ||
| Class A Common Stock, $0.0001 par value; 455,000,000 shares authorized; 361,096,457 and 216,943,349 shares issued and outstanding as of December 31, 2024 and 2023, respectively | 35 | 22 | ||
| Class B Common Stock, $0.0001 par value; 44,000,000 shares authorized; 32,535,408 and 37,485,408 shares issued and outstanding as of December 31, 2024 and 2023, respectively | 3 | 4 | ||
| Additional paid-in capital | 1,125,470 | 606,135 | ||
| Accumulated deficit | (943,060) | (592,379) | ||
| Accumulated other comprehensive income | 205 | 199 | ||
| Total stockholders’ equity (deficit) | 182,653 | 28,168 | ||
| Total liabilities and stockholders’ equity (deficit) | $ | 553,953 | $ | 151,122 |
SOUNDHOUND AI, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In thousands, except share and per share data)
(Unaudited)
| Three Months Ended December 31, | ||||
|---|---|---|---|---|
| 2024 | 2023 | |||
| Revenues | $ | 34,543 | $ | 17,147 |
| Operating expenses: | ||||
| Cost of revenues | 20,759 | 3,911 | ||
| Sales and marketing | 9,566 | 4,469 | ||
| Research and development | 20,394 | 12,713 | ||
| General and administrative | 16,437 | 7,641 | ||
| Change in fair value of contingent acquisition liabilities | 220,946 | — | ||
| Amortization of intangible assets | 3,513 | — | ||
| Restructuring | — | 806 | ||
| Total operating expenses | 291,615 | 29,540 | ||
| Operating loss | (257,072) | (12,393) | ||
| Other expense, net: | ||||
| Loss on early extinguishment of debt | (42) | — | ||
| Interest expense | (1,309) | (5,460) | ||
| Other income (expense), net | 135 | 1,457 | ||
| Total other expense, net | (1,216) | (4,003) | ||
| Loss before provision for income taxes | (258,288) | (16,396) | ||
| Provision for income taxes | 311 | 1,607 | ||
| Net loss | $ | (258,599) | $ | (18,003) |
| Cumulative dividends attributable to Series A Preferred Stock | — | (568) | ||
| Net loss attributable to SoundHound common shareholders | $ | (258,599) | $ | (18,571) |
| Other comprehensive income: | ||||
| Unrealized gains (losses) on investments | (57) | 2 | ||
| Comprehensive loss | $ | (258,656) | $ | (18,569) |
| Net loss per share: | ||||
| Basic and diluted | $ | (0.69) | $ | (0.07) |
| Weighted-average common shares outstanding: | ||||
| Basic and diluted | 375,102,329 | 248,250,552 |
SOUNDHOUND AI, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In thousands, except share and per share data)
| Year Ended <br>December 31, | ||||||
|---|---|---|---|---|---|---|
| 2024 | 2023 | 2022 | ||||
| (Unaudited) | ||||||
| Revenues | $ | 84,693 | $ | 45,873 | $ | 31,129 |
| Operating expenses: | ||||||
| Cost of revenues | 43,309 | 11,307 | 9,599 | |||
| Sales and marketing | 29,126 | 18,893 | 20,367 | |||
| Research and development | 70,555 | 51,439 | 76,392 | |||
| General and administrative | 53,270 | 28,285 | 30,443 | |||
| Change in fair value of contingent acquisition liabilities | 222,670 | — | — | |||
| Amortization of intangible assets | 7,116 | — | — | |||
| Restructuring | — | 4,557 | — | |||
| Total operating expenses | 426,046 | 114,481 | 136,801 | |||
| Loss from operations | (341,353) | (68,608) | (105,672) | |||
| Other expense, net: | ||||||
| Loss on early extinguishment of debt | (15,629) | (837) | — | |||
| Interest expense | (12,168) | (16,733) | (6,893) | |||
| Other income (expense), net | 9,222 | 1,155 | (1,259) | |||
| Total other expense, net | (18,575) | (16,415) | (8,152) | |||
| Loss before provision for income taxes | (359,928) | (85,023) | (113,824) | |||
| Provision for income taxes | (9,247) | 3,914 | 2,889 | |||
| Net loss | (350,681) | (88,937) | (116,713) | |||
| Cumulative dividends attributable to Series A Preferred Stock | (416) | (2,774) | — | |||
| Net loss attributable to SoundHound common shareholders | (351,097) | (91,711) | (116,713) | |||
| Other comprehensive loss: | ||||||
| Unrealized gains on investments | 6 | 199 | — | |||
| Comprehensive loss | $ | (350,675) | $ | (88,738) | $ | (116,713) |
| Net loss per share: | ||||||
| Basic and diluted | $ | (1.04) | $ | (0.40) | $ | (0.74) |
| Weighted-average common shares outstanding: | ||||||
| Basic and diluted | 338,462,574 | 229,264,904 | 157,317,695 |
SOUNDHOUND AI, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
| Year Ended <br>December 31, | ||||||
|---|---|---|---|---|---|---|
| 2024 | 2023 | 2022 | ||||
| (Unaudited) | ||||||
| Cash flows from operating activities: | ||||||
| Net loss | $ | (350,681) | $ | (88,937) | $ | (116,713) |
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
| Depreciation and amortization | 16,054 | 2,313 | 4,037 | |||
| Stock-based compensation | 33,145 | 27,931 | 28,792 | |||
| Loss on change in fair value of ELOC program | — | 1,901 | 1,075 | |||
| Change in fair value of derivative and warrant liability | — | — | 606 | |||
| Amortization of debt issuance cost | 1,621 | 5,400 | 2,287 | |||
| Non-cash lease amortization | 2,613 | 3,346 | 3,189 | |||
| Loss on early extinguishment of debt | 15,629 | 837 | — | |||
| Foreign currency gain/loss from remeasurement | (24) | 143 | — | |||
| Change in fair value of contingent acquisition liabilities | 222,670 | — | — | |||
| Deferred income taxes | (12,183) | 30 | 2,127 | |||
| Other, net | (580) | 93 | — | |||
| Changes in operating assets and liabilities: | ||||||
| Accounts receivable, net | (10,264) | (627) | (1,354) | |||
| Prepaid expenses | — | 1,590 | (1,238) | |||
| Other current assets | (3,131) | (821) | 299 | |||
| Contract assets | (7,304) | (19,578) | (8,658) | |||
| Other non-current assets | (196) | 671 | (274) | |||
| Accounts payable | (6,401) | (1,162) | 302 | |||
| Accrued liabilities | 611 | 4,266 | 116 | |||
| Other current liabilities | (642) | — | — | |||
| Operating lease liabilities | (3,214) | (3,657) | (3,912) | |||
| Deferred revenue | (6,186) | (4,135) | (7,646) | |||
| Other non-current liabilities | (415) | 2,131 | 2,946 | |||
| Net cash used in operating activities | (108,878) | (68,265) | (94,019) | |||
| Cash flows from investing activities: | ||||||
| Purchases of property and equipment | (640) | (392) | (1,329) | |||
| Payment related to acquisitions, net of cash acquired | (11,732) | — | — | |||
| Net cash used in investing activities | (12,372) | (392) | (1,329) | |||
| Cash flows from financing activities: | ||||||
| Proceeds from the issuance of Series A Preferred Stock, net of issuance costs | — | 24,942 | — | |||
| Proceeds from sales of Class A common stock under the ELOC program, net of issuance costs | — | 71,615 | — | |||
| Proceeds from sales of Class A common stock under the Sales Agreement, Equity Distribution Agreement and Execute Equity Distribution Agreement | 407,270 | 12,412 | — | |||
| Proceeds from exercise of stock options and employee stock purchase plan | 29,685 | — | — |
SOUNDHOUND AI, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS – Continued
(In thousands)
| Year Ended <br>December 31, | ||||||
|---|---|---|---|---|---|---|
| 2024 | 2023 | 2022 | ||||
| (Unaudited) | ||||||
| Proceeds from warrants exercised | 23 | — | — | |||
| Payment of financing costs associated with the Sales Agreement, Equity Distribution Agreement and Execute Equity Distribution Agreement | (10,357) | — | — | |||
| Proceeds from the issuance of debt, net of issuance costs | — | 85,087 | — | |||
| Proceeds from the issuance of common stock | — | 9,369 | 4,160 | |||
| Proceeds from Business Combination and PIPE, net of transaction costs | — | — | 90,689 | |||
| Payments on notes payable | (215,373) | (35,029) | (11,545) | |||
| Payment to settle contingent holdback liabilities from SYNQ3 acquisition | (217) | — | — | |||
| Payments on finance leases | (125) | (159) | (1,303) | |||
| Net cash provided by financing activities | 210,906 | 168,237 | 82,001 | |||
| Effects of exchange rate changes on cash | 225 | (20) | — | |||
| Net change in cash, cash equivalents, and restricted cash equivalents | 89,881 | 99,560 | (13,347) | |||
| Cash, cash equivalents, and restricted cash equivalents, beginning of year | 109,035 | 9,475 | 22,822 | |||
| Cash, cash equivalents, and restricted cash equivalents, end of year | $ | 198,916 | $ | 109,015 | $ | 9,475 |
| Reconciliation to amounts on the consolidated balance sheets: | ||||||
| Cash and cash equivalents | $ | 198,240 | $ | 95,260 | $ | 9,245 |
| Current portion of restricted cash equivalents | — | — | — | |||
| Non-current portion of restricted cash equivalents | 676 | 13,775 | 230 | |||
| Total cash, cash equivalents, and restricted cash equivalents shown in the consolidated statements of cash flows | $ | 198,916 | $ | 109,035 | $ | 9,475 |
SOUNDHOUND AI, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS – Continued
(In thousands)
| Year Ended <br>December 31, | ||||||
|---|---|---|---|---|---|---|
| 2024 | 2023 | 2022 | ||||
| (Unaudited) | ||||||
| Supplemental disclosures of cash flow information: | ||||||
| Cash paid for interest | $ | 6,337 | $ | 11,984 | $ | 4,364 |
| Cash paid for income taxes | $ | 2,717 | $ | 2,356 | $ | 1,044 |
| Noncash investing and financing activities: | ||||||
| Conversion of Series A Preferred Stock to Class A common stock | $ | 14,187 | $ | 10,755 | $ | — |
| Debt discount through issuance of common stock warrants | $ | — | $ | 4,136 | $ | — |
| Issuance of Class A Common Stock to settle commitment shares related to the ELOC program | $ | — | $ | 915 | $ | — |
| Issuance of Class A Common Stock to settle obligations under Amelia Debt | $ | 11,817 | $ | — | $ | — |
| Issuance of Class A Common Stock to settle contingent holdback consideration of SYNQ3 acquisition | $ | 189 | $ | — | $ | — |
| Conversion of redeemable convertible preferred stock to common stock pursuant to Business Combination | $ | — | $ | — | $ | 279,503 |
| Conversion of convertible note into common stock pursuant to Business Combination | $ | — | $ | — | $ | 20,239 |
| Operating lease liabilities arising from obtaining right-of-use assets | $ | 1,559 | $ | — | $ | 650 |
| Deferred offering costs reclassified to additional paid-in capital | $ | 220 | $ | — | $ | — |
| Fair value of Class A common stock and deferred equity consideration issued for SYNQ3 acquisition | $ | 9,687 | $ | — | $ | — |
| Fair value of contingent earnout consideration under SYNQ3 and Amelia acquisitions | $ | 286,898 | $ | — | $ | — |
| Fair value of contingent holdback consideration under SYNQ3 acquisition | $ | 570 | $ | — | $ | — |
| Fair value of deferred cash consideration under other acquisition | $ | 195 | $ | — | $ | — |
6